LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
NYSE:LAD - New York Stock Exchange, Inc. - US5367971034 - Common Stock - Currency: USD
Overall LAD gets a fundamental rating of 5 out of 10. We evaluated LAD against 121 industry peers in the Specialty Retail industry. While LAD is still in line with the averages on profitability rating, there are concerns on its financial health. LAD has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
LAD had positive earnings in the past year.
LAD had a positive operating cash flow in the past year.
Each year in the past 5 years LAD has been profitable.
The reported operating cash flow has been mixed in the past 5 years: LAD reported negative operating cash flow in multiple years.
1.2 Ratios
LAD's Return On Assets of 3.47% is fine compared to the rest of the industry. LAD outperforms 62.81% of its industry peers.
LAD's Return On Equity of 12.05% is fine compared to the rest of the industry. LAD outperforms 68.59% of its industry peers.
LAD has a Return On Invested Capital (5.59%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for LAD is significantly below the industry average of 13.08%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.47% | ||
| ROE | 12.05% | ||
| ROIC | 5.59% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.38%
ROE(5y)18.54%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
LAD has a Profit Margin of 2.22%. This is comparable to the rest of the industry: LAD outperforms 59.50% of its industry peers.
In the last couple of years the Profit Margin of LAD has remained more or less at the same level.
LAD has a better Operating Margin (4.41%) than 61.98% of its industry peers.
In the last couple of years the Operating Margin of LAD has grown nicely.
The Gross Margin of LAD (15.41%) is worse than 88.43% of its industry peers.
LAD's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.41% | ||
| PM (TTM) | 2.22% | ||
| GM | 15.41% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LAD is destroying value.
Compared to 1 year ago, LAD has less shares outstanding
LAD has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, LAD has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.49 indicates that LAD is not a great score, but indicates only limited risk for bankruptcy at the moment.
LAD has a Altman-Z score (2.49) which is comparable to the rest of the industry.
LAD has a debt to FCF ratio of 180.00. This is a negative value and a sign of low solvency as LAD would need 180.00 years to pay back of all of its debts.
LAD has a worse Debt to FCF ratio (180.00) than 61.16% of its industry peers.
A Debt/Equity ratio of 1.96 is on the high side and indicates that LAD has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.96, LAD is doing worse than 69.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.96 | ||
| Debt/FCF | 180 | ||
| Altman-Z | 2.49 |
ROIC/WACC0.64
WACC8.74%
2.3 Liquidity
A Current Ratio of 1.19 indicates that LAD should not have too much problems paying its short term obligations.
With a Current ratio value of 1.19, LAD is not doing good in the industry: 62.81% of the companies in the same industry are doing better.
A Quick Ratio of 0.28 indicates that LAD may have some problems paying its short term obligations.
LAD's Quick ratio of 0.28 is on the low side compared to the rest of the industry. LAD is outperformed by 77.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.28 |
3. Growth
3.1 Past
LAD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.64%.
Measured over the past years, LAD shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.64% on average per year.
Looking at the last year, LAD shows a quite strong growth in Revenue. The Revenue has grown by 12.81% in the last year.
The Revenue has been growing by 23.35% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
3.2 Future
LAD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.37% yearly.
LAD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.67% yearly.
EPS Next Y19.31%
EPS Next 2Y18.2%
EPS Next 3Y17.61%
EPS Next 5Y16.37%
Revenue Next Year7.25%
Revenue Next 2Y7.3%
Revenue Next 3Y8.29%
Revenue Next 5Y6.67%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 9.44, the valuation of LAD can be described as very reasonable.
Based on the Price/Earnings ratio, LAD is valued cheaply inside the industry as 85.95% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of LAD to the average of the S&P500 Index (28.18), we can say LAD is valued rather cheaply.
A Price/Forward Earnings ratio of 7.11 indicates a rather cheap valuation of LAD.
LAD's Price/Forward Earnings ratio is rather cheap when compared to the industry. LAD is cheaper than 90.91% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.81. LAD is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.44 | ||
| Fwd PE | 7.11 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of LAD indicates a somewhat cheap valuation: LAD is cheaper than 60.33% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, LAD is valued a bit more expensive than 60.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 105.13 | ||
| EV/EBITDA | 8.39 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LAD's earnings are expected to grow with 17.61% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.49
PEG (5Y)0.46
EPS Next 2Y18.2%
EPS Next 3Y17.61%
5. Dividend
5.1 Amount
LAD has a yearly dividend return of 0.75%, which is pretty low.
In the last 3 months the price of LAD has falen by -21.16%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
LAD's Dividend Yield is a higher than the industry average which is at 5.48.
With a Dividend Yield of 0.75, LAD pays less dividend than the S&P500 average, which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
5.2 History
The dividend of LAD is nicely growing with an annual growth rate of 11.85%!
LAD has paid a dividend for at least 10 years, which is a reliable track record.
LAD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
7.04% of the earnings are spent on dividend by LAD. This is a low number and sustainable payout ratio.
The dividend of LAD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP7.04%
EPS Next 2Y18.2%
EPS Next 3Y17.61%
NYSE:LAD (5/5/2025, 10:57:35 AM)
297.67
+1.17 (+0.39%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners104.39%
Inst Owner Change1.52%
Ins Owners0.93%
Ins Owner Change-10.75%
Market Cap7.75B
Analysts84
Price Target425.26 (42.86%)
Short Float %6.24%
Short Ratio4.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP7.04%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.81%
Min EPS beat(2)6.59%
Max EPS beat(2)7.02%
EPS beat(4)3
Avg EPS beat(4)0.28%
Min EPS beat(4)-23.36%
Max EPS beat(4)10.88%
EPS beat(8)4
Avg EPS beat(8)0.37%
EPS beat(12)5
Avg EPS beat(12)0.13%
EPS beat(16)9
Avg EPS beat(16)8.32%
Revenue beat(2)1
Avg Revenue beat(2)-1.69%
Min Revenue beat(2)-3.72%
Max Revenue beat(2)0.33%
Revenue beat(4)1
Avg Revenue beat(4)-1.71%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)2
Avg Revenue beat(8)-1.93%
Revenue beat(12)3
Avg Revenue beat(12)-1.33%
Revenue beat(16)7
Avg Revenue beat(16)1.11%
PT rev (1m)-3.62%
PT rev (3m)4.29%
EPS NQ rev (1m)0.53%
EPS NQ rev (3m)-1.51%
EPS NY rev (1m)0.84%
EPS NY rev (3m)1.55%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)-1.35%
Revenue NY rev (1m)0.21%
Revenue NY rev (3m)-0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.44 | ||
| Fwd PE | 7.11 | ||
| P/S | 0.21 | ||
| P/FCF | 105.13 | ||
| P/OCF | 18.23 | ||
| P/B | 1.16 | ||
| P/tB | 3.89 | ||
| EV/EBITDA | 8.39 |
EPS(TTM)31.53
EY10.59%
EPS(NY)41.89
Fwd EY14.07%
FCF(TTM)2.83
FCFY0.95%
OCF(TTM)16.33
OCFY5.49%
SpS1390.25
BVpS255.69
TBVpS76.44
PEG (NY)0.49
PEG (5Y)0.46
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.47% | ||
| ROE | 12.05% | ||
| ROCE | 9.62% | ||
| ROIC | 5.59% | ||
| ROICexc | 5.65% | ||
| ROICexgc | 7.23% | ||
| OM | 4.41% | ||
| PM (TTM) | 2.22% | ||
| GM | 15.41% | ||
| FCFM | 0.2% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.38%
ROE(5y)18.54%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.62%
ROICexgc(5y)11.25%
ROCE(3y)12.38%
ROCE(5y)13.84%
ROICexcg growth 3Y-19.24%
ROICexcg growth 5Y1.49%
ROICexc growth 3Y-24.13%
ROICexc growth 5Y-3.25%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score4
Asset Turnover1.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.96 | ||
| Debt/FCF | 180 | ||
| Debt/EBITDA | 6.92 | ||
| Cap/Depr | 119% | ||
| Cap/Sales | 0.97% | ||
| Interest Coverage | 2.16 | ||
| Cash Conversion | 22.49% | ||
| Profit Quality | 9.19% | ||
| Current Ratio | 1.19 | ||
| Quick Ratio | 0.28 | ||
| Altman-Z | 2.49 |
F-Score4
WACC8.74%
ROIC/WACC0.64
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
EPS Next Y19.31%
EPS Next 2Y18.2%
EPS Next 3Y17.61%
EPS Next 5Y16.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
Revenue Next Year7.25%
Revenue Next 2Y7.3%
Revenue Next 3Y8.29%
Revenue Next 5Y6.67%
EBIT growth 1Y-8.11%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year19.46%
EBIT Next 3Y16.94%
EBIT Next 5Y12.13%
FCF growth 1Y110.49%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y189.99%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%